02 says it will dump iPhone usage limits

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Stung by the backlash of criticism after announcing what many considered a punishing tariff for the Apple iPhone in the UK, 02, the exclusive carrier, is busy back-pedalling on the issue. It’s previous tariff for the iPhone was described as “unlimited” at the launch until everyone realised it was actually capped at 200MB. A story on the Daily Telegraph now reveals that O2 will scrap plans to cap web usage on the Apple iPhone when it launches on Friday. CEO Matthew Key said ”customers find ‘unlimited with limits’ confusing.” But it may also be the case that 02 realised that they were not going to get away with the initial pitch, especially with customers paying £269 for the handset, in a market where most handsets are free/subsidised, as well as a tariff from £35 to £55 which could run into over £1,500 a year.

02’s PR people are working overtime today, releasing a statement from Sally Cowdry, O2 UK’s marketing director, who said O2 will stick to their unlimited mobile data services plan (together with The Cloud’s public Wi-Fi network), but they will be dropping the planned fair use policy:

“a fair use policy was set in place at an amount that’s miles beyond expected average use. This policy was intended to prevent commercial exploitation or using the iPhone as a modem, both of which would put everyone else’s experience at risk. We now appreciate that having set limits as part of the fair use policy conflicted with our objective of encouraging internet usage on the iPhone. People don’t speak in megabites and customer feedback has been that if we say unlimited, it should be unlimited.”

However, right now the iPhone tariff section on the O2 site still says “fair usage policy applies.” Perhaps they had better make up their mind.